SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended September 30, 1995
Commission File Number: 0-14453
National Real Estate Limited Partnership
Income Properties
(Exact name of registrant as specified in its charter)
Wisconsin
(State or other jurisdiction of
incorporation or organization)
39-1503893
(I.R.S. Employer Identification Number)
9800 West Bluemound Road,
Wauwatosa, Wisconsin 53226-4353
(Address of principal executive offices)
(zip code)
Registrant's telephone number, including area code:
(414) 453-3498
N/A
Former name, address and fiscal year if changed since
last report.
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Sections 13
or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period
that the registrant was required to file such reports)
and (2) has been subject to such filing requirements
for the past 90 days.
(X) Yes No
<PAGE>
NATIONAL REAL ESTATE LIMITED
PARTNERSHIP INCOME PROPERTIES
INDEX
Page
PART I. FINANCIAL INFORMATION
Balance Sheet (unaudited) - September 30, 1995
and December 31, 1994 . . . . . . . . . . . . . .2
Statement of Operations (unaudited) -
Three months and nine months ended
September 30, 1995 and 1994 . . . . . . . . . . .3
Statements of Cash Flows (unaudited) -
Nine months ended September 30, 1995 and 1994 . .4
Notes to Financial Statements (unaudited) . . .5-6
Management's Discussion and Analysis of
Financial Condition and Results of Operation. .7-8
PART II. OTHER INFORMATION AND SIGNATURES . . 9-10
<PAGE>
PART I. FINANCIAL INFORMATION
NATIONAL REAL ESTATE LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Balance Sheet
(Unaudited)
September 30, December 31,
1995 1994
ASSETS
Current Assets
Cash $539,129 $409,508
Escrow deposits and other assets (Note 4)
8,548 17,420
Other Assets
Investment properties, at cost
Land 1,267,695 1,267,695
Buildings and improvements
6,003,785 5,992,076
7,271,480 7,259,771
Less accumulated depreciation
1,871,516 1,718,173
5,399,964 5,541,598
$5,947,641 $5,968,526
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Tenant security deposits
$6,242 $7,823
Rents received in advance
29,363 31,530
Accrued interest payable to
Individual General Partner
414,969 361,303
Accrued expenses and other liabilities
89,808 100,687
Note payable to Individual General
Partner (Note 6)
271,020 271,020
811,402 772,363
Partners' Capital (deficiency) (Note 5):
General Partners
$(86,048) $(84,252)
Limited Partners (authorized--10,000
Interests; outstanding--9,034.01 Interests)
5,243,958 5,302,086
Less 29.86 Interests held in Treasury
(21,671) (21,671)
5,136,239 5,196,163
$5,947,641 $5,968,526
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Statement of Operations
(Unaudited)
Three months ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
INCOME
Operating income
$228,987 $201,140 655,483 581,384
Other income
10,692 10,457 31,285 28,964
Total Income
239,679 211,597 686,768 610,348
OPERATING EXPENSES
Property operating expenses
131,463 70,403 329,201 260,605
Depreciation and amortization
51,220 50,539 153,424 151,568
Interest expense
18,355 14,296 53,667 39,051
Administrative expense
33,671 37,275 134,808 127,796
Total Expenses
234,709 172,513 671,100 579,020
Income(Loss) from operations
4,970 39,084 15,668 31,328
Other Income (expenses)
Interest income
7,111 3,212 21,875 8,069
Net Income (Loss)
$12,081 $42,296 37,543 39,397
Net Income (Loss) attributable to
General Partners (3%)
$362 $1,269 1,126 1,182
Net Income (Loss) attributable to
Limited Partners (97%)
$11,719 $41,027 36,417 38,215
Per Limited Partnership Interest
Outstanding--9,004.15 Interests
$1.30 $4.56 $4.04 $4.24
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE
LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Statement of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
1995 1994
Operating Activities
Net income (loss) for the period
$37,543 $39,397
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 153,343 151,569
Changes in operating assets and
liabilities:
Escrow deposits & other assets
8,872 (20,211)
Tenant security deposits
(1,581) 165
Rents received in advance
(2,167) (11,394)
Accrued expenses and other liabilities
42,787 29,552
NET CASH PROVIDED BY (USED IN)
238,797 189,078
OPERATING ACTIVITIES
Investing activities:
Additions to investment property
(11,709) (53,227)
Financing activities:
Distributions to partners
(97,468) (97,468)
INCREASE (DECREASE) IN CASH
129,620 38,383
Cash at beginning of period
409,508 304,845
CASH AT END OF PERIOD
$539,128 $343,228
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED
PARTNERSHIP INCOME PROPERTIES
(A Wisconsin Limited Partnership)
Notes to Financial Statements
(Unaudited)
September 30, 1995
1. In the opinion of the General Partners, the
accompanying unaudited financial statements
contain all adjustments (consisting of normal
recurring accruals) which are necessary for a fair
presentation. The statements, which do not include
all of the information and footnotes required by
generally accepted accounting principles for
complete financial statements, should be read in
conjunction with the National Real Estate Limited
Partnership Income Properties annual report for
the year ended December 31, 1994. Refer to the
footnotes of those statements for additional
details on the Partnership's financial condition.
The operating results for the period ended
September 30, 1995, may not be indicative of the
operating results for the entire year.
2. National Real Estate Limited Partnership Income
Properties (the "Partnership") was organized under
the Wisconsin Uniform Limited Partnership Act
pursuant to a Certificate of Limited Partnership
dated December 18, 1984, for the purpose of
investing in residential, commercial, and
industrial real properties. John Vishnevsky and
National Development and Investment, Inc.,
contributed the sum of $6,000 to the Partnership
as General Partners. The Limited Partnership
Agreement had authorized the issuance of 10,000
Limited Partnership Interests (the "Interests") at
$1,000 per Interest with the offering period
commencing January 31, 1985. Upon conclusion of
the offering in December 1986, the Partnership had
raised $9,024,556 in capital representing 9,034.01
Interests.
3. National Realty Management, Inc. (NRMI): The
Partnership incurred property management fees of
$36,586 under an agreement with NRMI for the
period presented.
4. Real estate taxes are charged to operations based
on actual taxes paid for the prior year and are
adjusted for normal annual increases. Taxes for
Tucson Lock-It Lockers, Phoenix Lock-It Lockers,
Cave Creek Lock-It Lockers, and Northridge Commons
are being accrued monthly at $4,616, $1,831, $389,
and $3,844, respectively.
5. Changes in Partners' Equity:
LIMITED PARTNERS
Quarter Ended September 30, 1995
Partner's Equity, beginning of quarter $5,242,083
Distributions (31,515)
Net Income (Loss) 11,719
Partners' Equity, end of quarter $5,222,287
Limited Partner's equity is net of 29.86 interests held
in treasury of ($21,671).
Quarter Ended September 30, 1994
Partner's Equity, beginning of quarter $5,289,464
Distributions (31,515)
Net Income (Loss) 41,027
Partners' Equity, end of quarter $5,298,976
Limited Partner's equity is net of 29.86 interests held
in treasury of ($21,671).
GENERAL PARTNERS
Quarter Ended September 30, 1995
Partner's Equity, beginning of quarter $(85,436)
Distributions (974)
Net Income (Loss) 362
Partners' Equity, end of quarter $(86,048)
Quarter Ended September 30, 1994
Partner's Equity, beginning of quarter $(83,973)
Distributions (974)
Net Income (Loss) 1,269
Partners' Equity, end of quarter $(83,678)
TOTAL
Quarter Ended September 30, 1995
Partner's Equity, beginning of quarter $5,156,647
Distributions (32,489)
Net Income (Loss) 12,081
Partners' Equity, end of quarter $5,136,239
Quarter Ended September 30, 1994
Partner's Equity, beginning of quarter $5,205,491
Distributions (32,489)
Net Income (Loss) 42,296
Partners' Equity, end of quarter $5,215,298
Limited Partner's equity is net of 29.86
interests held in treasury of ($21,671).
6. As outlined in the prospectus, the General
Partners agreed to make loans to the Partnership
up to an aggregate of 3% of the gross proceeds of
the offering to the extent necessary to provide
distributions to the limited partners at
annualized rates equal to 8% in 1985, 8.25% in
1986, and 8.5% in 1987. The loan will be repaid
solely from sales proceeds, with compounding
interest equal to the cost of their funds or 12%,
whichever is lower. As of September 30, 1995,
interest totaling $414,969 has accrued.
7. Northridge Commons' tenants pay monthly fixed rent
payments plus estimated charges for taxes, costs
of insurance premiums, administrative costs, and
operating expenses with respect to common areas.
<PAGE>
NATIONAL REAL ESTATE LIMITED
PARTNERSHIP INCOME PROPERTIES
(A Wisconsin Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 1995
The Partnership currently owns and operates four
investment properties; Tucson Lock-It Lockers, a 49,885
net rentable square foot mini warehouse complex in
Tucson, Arizona; Phoenix Lock-It Lockers, a 58,766 net
rentable square foot mini warehouse complex in Phoenix,
Arizona; a portion of Cave Creek Lock-It Lockers
containing 8,236 of 46,028 net rentable square feet in
Phoenix, Arizona; and Northridge Commons, a 20,700 net
rentable square foot community shopping center in
Milwaukee, Wisconsin.
Occupancy based upon net rentable square feet for the
third quarter averaged 98.9% for Tucson Lock-It
Lockers; 98.4% for Phoenix Lock-It Lockers; 100% for
Northridge Commons; and 98% for Cave Creek Lock-It
Lockers. This compares to an average of 99% for Tucson
Lock-It Lockers; 98.8% for Phoenix Lock-It Lockers;
60.4% for Northridge Commons; and 99.6% for Cave Creek
Lock-It Lockers during the same period of 1994.
In order to be consistent with the current market
prices at surrounding locker facilities rental rates
were increased at Tucson, Phoenix, and Cave Creek
Lock-It Lockers in April. Tucson Lock-It Lockers
repaired the driveway and roofing. Future projects to
be completed at Tucson Lock-It Lockers include painting
and additional asphalt work. Improvements to Phoenix
Lock-It Lockers included a painting and wiring project
and also new carpeting and a new air conditioner were
installed. Phoenix Lock-It Lockers will also be
repaving the driveways. At Cave Creek Lock-It Lockers
several painting projects were completed including
painting the fence around the property and a new
security camera system. Northridge Commons has
resurfaced, repaired, and restriped the entire parking
lot and all painted all of the doors.
Upon the purchase of Cave Creek Lock-It Lockers, the
Partnership entered into master lease agreements with
the Seller, Enterprise Growth Group (EGG). The
Partnership had been informed that EGG had been funding
the lease payments because cash flow from the property
had not been sufficient to cover them. EGG made only a
partial lease payment in August, 1991 for the July
installment and was delinquent in subsequent payments.
The General Partners officially notified EGG of their
default on October 17, 1991. Management of the property
was turned over to National Realty Management, Inc. on
November 1, 1991 in order to ensure maximization of net
operating income to the Partnership. As of early 1992,
the master lease agreements expired. The Partnership
started legal proceedings relating to collection from
EGG and its principals.
Vacancies continue to plague the surrounding retail
shopping area of Northridge Commons. Therefore
Northridge Commons maintained the same base rent as it
did during the same period of 1994. Cellular One signed
a five year lease agreement for 4,738 square feet (or
about 23% of the net rentable square footage) with
Northridge Commons has done extensive renovations at
their own expense including a new pylon sign. Insure
One, a major insurance company based out of Illinois,
entered a five (5) year lease commencing July 1, 1995,
therefore increasing the occupancy at Northridge
Commons to 100%. Talbots remains as the anchor tenant
and has done well since their expansion in 1990.
NATIONAL REAL ESTATE LIMITED
PARTNERSHIP INCOME PROPERTIES
(A Wisconsin Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations (Cont.)
September 30, 1995
During the third quarter of 1995 rental revenue for
Tucson Lock-It Lockers, Phoenix Lock-It Lockers, and
Cave Creek Lock-It Lockers increased compared to the
third quarter of 1994 due to increased rental rates.
Also during the third quarter of 1995, rental revenue
for Northridge Commons increased compared to the third
quarter of 1994 due to an increase in occupancy at
Northridge Commons.
Operating expenses during the third quarter of 1995
increased compared to the operating expenses during the
same quarter in 1994 due to a major parking lot
project, which will be paid by the tenants at
Northridge Commons, advertising at Tucson Lock-It, and
other renovations at Phoenix Lock-It Lockers.
The Partnership continued cash distributions to its
partners with distributions totaling $32,489 for the
second quarter of 1995. These distributions are
required to be allocated 97% to Limited Partners
($31,515) and 3% to the General Partners ($974).
<PAGE>
PART II. OTHER INFORMATION
Item 6(b). Reports on Form 8-K
There were no reports on Form 8-K for the quarter ended
September 30, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto
duly authorized.
National Real Estate Limited Partnership
Income Properties
(Registrant)
Date /S/November 15, 1995
/S/ John Vishnevsky
________________________________
John Vishnevsky
President and Chief Operating and
Executive Officer
National Development and Investment, Inc.
Corporate General Partner
Date /S/November 15, 1995
/S/ John Vishnevsky
__________________________________
John Vishnevsky
Chief Financial and Accounting Officer
Date /S/November 15, 1995
Stephen P. Kotecki
__________________________________
Stephen P. Kotecki
President
EC Corp
Corporate General Partner
B:\NIP-3QTR.ELE
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 547,677
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 547,677
<PP&E> 7,271,480
<DEPRECIATION> 1,871,516
<TOTAL-ASSETS> 5,947,641
<CURRENT-LIABILITIES> 125,413
<BONDS> 685,989
<COMMON> 0
0
0
<OTHER-SE> 5,136,239<F1>
<TOTAL-LIABILITY-AND-EQUITY> 5,947,641
<SALES> 0
<TOTAL-REVENUES> 246,790
<CGS> 0
<TOTAL-COSTS> 216,354
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,355
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,081
<EPS-PRIMARY> 1.30<F2>
<EPS-DILUTED> 0
<FN>
<F1>Refers to General Partner's and Limited Partner's Capital
<F2>97% Limited Partners - Interest Outstanding = 9004.15
</FN>
</TABLE>
